Power Engineering - Irish north-south power deal agreed

18 July 2003 - Northern Ireland-based power generation company Premier Power Limited, a wholly-owned subsidiary of BG Group plc, announced today a major cross-border deal with Northern Ireland Electricity for 180 MW of electricity for onward supply to ESB, the Irish electricity company, through the North South interconnector.

The three-year agreement, with an option to extend to another three years, represents a landmark in North South energy trade and is the first of its kind for major capacity export from Northern Ireland to the Republic of Ireland.

Dermot Ahern T. D. Minister for Communications, Marine and Natural Resources and Ian Pearson, Parliamentary Under Secretary of State for Northern Ireland, welcomed the agreement at a signing ceremony in Dublin and acknowledged a new era in cross-border energy co-operation.

Bill Adamson, Vice President, UK Downstream, BG Group plc, said: "Today's agreement brings us one step closer to an All-island competitive energy market which is an effective mechanism for operating efficiently in the Irish marketplace. The agreement will assist in matching the demand for power in the Republic of Ireland, which is forecast to grow at three per cent each year over the lifetime of this contract. This is an example of how Ireland's main energy players can work together in a commercial environment to deliver benefits for the economies and customers on both sides of the border."

"This is a win, win deal for everyone," said NIE Director, Harry McCracken. "It is a demonstration of the importance of integrated electricity markets. The Moyle Interconnector with Scotland is already bringing competitive electricity prices to both parts of Ireland and we are now seeing how the freeing-up of energy markets is encouraging innovative transactions between the participants."

The deal, worth around £10m ($15.9m) per annum, will provide additional capacity to the Irish electricity industry. There are additional benefits for Northern Ireland including a reduction in costs for customers via contributions to fixed or network costs and the safeguarding of local jobs at Premier Power.

Michael McNicholas, ESB's Executive Director, Generation and Supply, said: "This contract shows how cross-border trading in electricity can benefit customers throughout the island. We are committed to facilitating competition and to an All-island power market. From the point of view of the Republic of Ireland electricity industry, this contract provides a good value method of meeting growing demand. The extra capacity will benefit all customers in the Republic."

The agreement between Premier Power and NIE also provides for an additional 60 MW of electricity for the Northern Ireland market from August 1, 2003 until 2012.

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